In this June 22, 2012 file photo, Tesla CEO Elon Musk waves during a rally at the Tesla factory in Fremont, Calif. Tesla Motors has selected Nevada for a massive, $5 billion factory that it will build to pump out batteries for a new generation of electric cars, a person familiar with the company’s plans said Wednesday, Sept. 3, 2014.

CREDIT: AP/Paul Sakuma

A state known for gambles has hit the jackpot when it comes to the future of automobiles. On Thursday, Nevada state officials are expected to announce that the state will be the site of electric car maker Tesla Motors’ $5 billion lithium-ion battery “gigafactory” — beating out tough competition from other western states including Texas, California, Arizona, and New Mexico.

Nevada will be hosting the 10-million-square-foot factory — the equivalent of about 174 football fields — not only thanks to the state’s low tax rates and proximity to renewable energy sources, but also due to a generous incentive package offered by the state, which until now has had little presence in the auto industry. While Tesla is taking advantage of Nevada’s business-friendly environment, the state has much to gain from the company’s presence. The plant, which is slated to be up and running by 2017, will employ up to 6,500 workers. It is eventually expected to produce more than all of the lithium-ion battery production in the world today.

Tesla is also planning to roll out its third vehicle, an electric car called the Model III, in 2017 to coincide with the launch of the plant. The Model III would offer a more affordable $35,000 price tag compared to current Tesla models that retail for more than double that price. Tesla needs to gigafactory to produce enough batteries to power enough cars to meet anticipated demand. Elon Musk, Tesla’s CEO, has estimated the gigafactory could slash the cost of lithium-ion batteries, which are the most expensive component of electric vehicles, by more than 30 percent. The car will have a 200-plus-mile range. The factory should produce enough batteries to power 500,000 vehicles annually by 2020.

The plant is sited just a couple hundred miles from Tesla’s current assembly plant in Fresno, California and near a lithium deposit, a key raw material for the batteries.

“I think the single most important factor is the site’s low-cost green power,” John Boyd, principal of The Boyd Company, a site selection firm that had forecast Nevada as the likely winner, told The Wall Street Journal. The area around Reno has access to wind, solar, and geothermal power.

Musk did recently announce that the company had placed a construction pad in Nevada at a site outside of Reno, but he also said the company may “do something similar in one or two other states.”

As of the end of August, just over 40,000 fully electric cars have sold in the U.S. this year, up 35 percent from last year. With fuel economy standards rapidly rising and electric car prices dropping, sales are expected to increase in the near future. The development of fast-charging stations in places like California and the U.K. is also key to the success of the industry.

“Superchargers give 170 miles of charge in just 30 minutes, just enough time to stop and have a coffee and be ready to go again,” Tesla’s Laura Hardy recently told the BBC.

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